XP Inc: Brazil's New Payroll Loan Program Will Boost GDP by 0.6%
SÃO PAULO, April 16, 2025 /PRNewswire/ -- XP Inc. (NASDAQ:XP), a leading, technology-driven platform and a trusted provider of low-fee financial products and services in Brazil, released a new research report from which reveals that Brazil's newly launched payroll-deductible loan program for private sector workers is set to inject a significant boost into the country's economy - adding an estimated 0.6 percentage points to GDP growth, or nearly BRL 70 billion (approx. USD 11.7 billion) in annualized terms.
The program, introduced by the federal government on March 21, opens access to more affordable credit via the Digital Work Card app, extending eligibility to 47 million formal employees, including household and agricultural workers. According to XP, this initiative is already showing strong demand, with over BRL 4.5 billion (approx. USD 750 million) in loans granted within just weeks of launch.
"This is not just a new credit product—it's a strategic macroeconomic lever," said Rodolfo Margato, XP's Economist and co-author of the report. "By replacing high-cost debt like credit card balances and overdrafts with lower-interest payroll loans, households will enjoy higher disposable income, which will ripple through to greater consumption and growth."
XP's analysis identifies two key transmission effects:
- A substitution effect: consumers swap expensive debt for cheaper loans, reducing debt service and increasing disposable income (+0.35 pp GDP impact).
- An incremental effect: greater credit access stimulates consumption-led lending growth (+0.2 pp GDP impact).
In light of the new policy and other recent government stimulus measures, XP has revised Brazil's 2025 GDP growth forecast upward from 2.0% to 2.3%, and 2026 from 1.0% to 1.5%. The report also outlines an optimistic scenario in which GDP growth could increase by up to 1.0 percentage point if adoption accelerates.
"Brazil's economy is showing resilience," added Luíza Pinese, XP Economist and co-author of the report. "This program is a powerful tool in softening the impact of global headwinds and tighter monetary conditions."
Link to full report: https://tinyurl.com/ypu8jjem
About XP Inc.
XP Inc. is one of the largest independent financial institutions in Brazil, owner of the brands XP, Rico, Clear, XP Educação, InfoMoney, among others. XP Inc. has over 4.6 million active clients and more than R$ 1.2 trillion in assets under custody. For the past 23 years, the company has been transforming the Brazilian financial market to improve people's lives. XP Inc. was a pioneer in the market with its network of investment advisors, which is now the largest in the country, with over 18,200 professionals. For more information, visit https://www.xpinc.com/
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SOURCE XP Inc.